PAR TECHNOLOGY CORP
For the period ended Sep 30, 2024. Filed Nov 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 8, 2024
PAR$20.55+7.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0000708821-24-000078
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0000708821-24-000113
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 93 previous paragraphs and 93 current paragraphs.
32 unchanged; 43 reworded; 18 added; 15 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 30 previous and 30 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
GAAP - Year-over-year 4.7% improvement
Current report
Total revenues were $96.8 million for the three months ended September 30, 2024, an increase of $28.1 million or 40.8% compared to $68.7 million for the three months ended September 30, 2023.
Current report
Subscription service revenues were $59.9 million for the three months ended September 30, 2024, an increase of $28.5 million or 91.0% compared to $31.4 million for the three months ended September 30, 2023. The increase was substantially driven by increased Engagement Cloud subscription service revenues of $21.8 million, of which $18.5 million was driven by inorganic increases in revenues of $10.7 million and $7.8 million stemming from the post-acquisition operations of the PAR Retail and Plexure product lines, respectively. The residual increase of $3.3 million from Engagement Cloud subscription services was driven by a 21.9% organic increase in active sites and an 8.4% organic increase in average revenue per site equally driven by cross-selling initiatives, upselling, and price increases. Operator Cloud subscription services increased $6.5 million of which $1.4 million was driven by an inorganic increase in revenues stemming from the post-acquisition operations of the TASK product line. The residual increase of $5.1 million from Operator Cloud subscription services was driven by a 16.8% increase in organic active sites and a 12.2% increase in average revenue per site equally driven by cross-selling initiatives, upselling, and price increases.
Current report
Total revenues were $245.0 million for the nine months ended September 30, 2024, an increase of $38.2 million or 18.5% compared to $206.8 million for the nine months ended September 30, 2023.
Current report
Professional service revenues were $40.8 million for the nine months ended September 30, 2024, an increase of $2.7 million or 7.1% from $38.1 million for the nine months ended September 30, 2023. The increase was substantially driven by a $3.1 million increase in hardware repair services and a $1.6 million increase in field operations, partially offset by a $1.7 million decrease in installation services.
Current report
Hardware margin as a percentage of hardware revenue for the three months ended September 30, 2024, was relatively unchanged at 25.5% as compared to 25.3% for the three months ended September 30, 2023.
Current report
G&A expenses were $27.4 million for the three months ended September 30, 2024, an increase of $9.8 million or 56.1% compared to $17.5 million for the three months ended September 30, 2023. The increase primarily consists of a $3.6 million increase in inorganic G&A expense stemming from post-acquisition operations of PAR Retail and TASK Group and a $2.1 million increase in organic compensation costs.
Current report
The residual increase was substantially driven by a $3.4 million increase in certain non-cash or non-recurring expenses consisting of $1.7 million in stock-based compensation, $1.1 million in costs related to transaction due diligence, $0.4 million in depreciation and amortization, and $0.2 million in asset impairment expense.
Current report
G&A expenses were $77.9 million for the nine months ended September 30, 2024, an increase of $25.0 million or 47.2% compared to $52.9 million for the nine months ended September 30, 2023. The increase primarily consists of a $5.1 million increase in inorganic G&A expense stemming from post-acquisition operations of PAR Retail and TASK Group and a $4.4 million increase in organic compensation costs.
Current report
The residual increase was substantially driven by a $13.8 million increase in certain non-cash or non-recurring expenses consisting of $6.2 million in stock-based compensation, $6.1 million in costs related to transaction due diligence, $0.9 million in depreciation and amortization, $0.4 million in severance, and $0.2 million in asset impairment expense.
Current report
Other Expense, Net
Current report
Interest expense, net was $3.4 million for the three months ended September 30, 2024, an increase of $1.7 million as compared to $1.8 million for the three months ended September 30, 2023. The increase was primarily driven by additional interest costs in connection with the Credit Facility. Refer to “Note 8 – Debt” of the notes to interim condensed consolidated financial statements in "Part I, Item 1. Financial Statements (unaudited)" of this Quarterly Report for additional information regarding the Credit Facility.
Current report
Interest expense, net was $6.8 million for the nine months ended September 30, 2024, an increase of $1.6 million as compared to $5.2 million for the nine months ended September 30, 2023. The increase was primarily driven by additional interest costs in connection with the Credit Facility.
Current report
•Engagement Cloud consisting of Punchh, PAR Retail, PAR Ordering, and Plexure product offerings.
Current report
•Operator Cloud consisting of PAR POS, PAR Payment Services, PAR Pay, Data Central, and TASK product offerings.
Current report
**Inorganic Operator Cloud ARR represents TASK ARR only as of September 30, 2024.
Current report
**Inorganic Operator Cloud active sites represents TASK active sites only as of September 30, 2024.
Current report
Cash used in operating activities was $28.6 million for the nine months ended September 30, 2024, compared to $18.5 million for the nine months ended September 30, 2023. The increase in cash used in operating activities of $10.1 million was substantially driven by an increase in cash used relating to our discontinued operations.
Removed paragraphs (15)
Previous report
GAAP - Year-over-year 9.8% improvement
Previous report
•Sale of PAR Government Systems Corporation: In June 2024, the Company sold PAR Government Systems Corporation for $95.0 million, before customary post-closing adjustments.
Previous report
Total revenues were $78.2 million for the three months ended June 30, 2024, an increase of $8.6 million or
Previous report
12.4% compared to $69.5 million for the three months ended June 30, 2023.
Previous report
Subscription service revenues were $44.9 million for the three months ended June 30, 2024, an increase of $14.5 million or 47.7% compared to $30.4 million for the three months ended June 30, 2023. The increase includes increased subscription service revenues from our Engagement Cloud services of $9.1 million, of which revenues of $10.1 million were contributed by the business and products that we acquired in the Stuzo Acquisition, and now sold under PAR Retail. Refer to “Note 3 – Acquisitions” of the notes to interim condensed consolidated financial statements in "Part I, Item 1. Financial Statements and Supplementary Data" of this Quarterly Report for additional information regarding Stuzo and the Stuzo Acquisition. Our Operator Cloud services increased $5.3 million driven by an 18.4% increase in active sites and a 14.0% increase in average revenue per site equally driven by cross-selling initiatives, upselling, and price increases.
Previous report
Total revenues were $148.2 million for the six months ended June 30, 2024, an increase of $10.1 million or 7.3% compared to $138.1 million for the six months ended June 30, 2023.
Previous report
Professional service revenues were $26.6 million for the six months ended June 30, 2024, which was relatively unchanged from $26.6 million for the six months ended June 30, 2023.
Previous report
G&A expenses were $25.4 million for the three months ended June 30, 2024, an increase of $8.9 million or 54.4% compared to $16.4 million for the three months ended June 30, 2023. The increase primarily consists of a $2.7 million increase in stock-based compensation and a $1.7 million increase in costs related to transaction due diligence, which are both classified as non-GAAP adjustments for management reporting. Please refer to "Non-GAAP Financial Measures" below for additional information regarding non-GAAP adjustments.
Previous report
The residual increase was primarily driven by inorganic G&A expense of $1.2 million stemming from post-acquisition operations of PAR Retail and higher organic compensation costs of $2.2 million.
Previous report
G&A expenses were $50.5 million for the six months ended June 30, 2024, an increase of $15.1 million or 42.8% compared to $35.4 million for the six months ended June 30, 2023. The increase primarily consists of increases of $5.0 million in costs related to transaction due diligence, $4.5 million in stock-based compensation, $0.6 million in severance, and $0.5 million in depreciation and amortization, which are classified as non-GAAP adjustments for management reporting. Please refer to "Non-GAAP Financial Measures" below for additional information regarding non-GAAP adjustments.
Previous report
The residual increase was primarily driven by inorganic G&A expense of $1.5 million stemming from post-acquisition operations of PAR Retail and higher organic compensation costs of $2.5 million.
Previous report
Other (Expense) Income, Net
Previous report
Interest expense, net was relatively unchanged at $1.6 million for the three months ended June 30, 2024 as compared to $1.7 million for the three months ended June 30, 2023.
Previous report
Interest expense, net was relatively unchanged at $3.3 million for the six months ended June 30, 2024 as compared to $3.4 million for the six months ended June 30, 2023.
Previous report
Cash used in operating activities was $37.4 million for the six months ended June 30, 2024, compared to $12.8 million for the six months ended June 30, 2023. Cash used in operating activities for the six months ended June 30, 2024 primarily consisted of a net loss from continuing operations net of non cash charges of $21.2 million and additional net working capital requirements substantially driven by an increase in accounts receivable of $8.0 million resulting from revenue growth.
Reworded paragraphs (43)
Previous wording
Non-GAAP - Year-over-year 5.5% improvement
Current wording
Non-GAAP - Year-over-year 2.6% decline
Previous wording
Net Loss from Cont. Ops.Year-over-year decline of $1.7 million
Current wording
Net Loss from Cont. Ops.Year-over-year decline of $1.4 million
Previous wording
Adjusted EBITDAYear-over-year improvement of $7.9 million
Current wording
Adjusted EBITDAYear-over-year improvement of $9.0 million
Previous wording
•After Period End - Completed Sale of Rome Research Corporation: On July 1, 2024, the Company sold Rome Research Corporation for $7.0 million, before customary post-closing adjustments.
Current wording
•Sale of Rome Research Corporation: On July 1, 2024, the Company sold Rome Research Corporation for $7.0 million, before customary post-closing adjustments, completing the divestiture of PAR's Government segment.
Previous wording
•After Period End - Completed Acquisition of TASK: In July 2024, the Company secured a $90.0 million Credit Facility which was used to complete its acquisition of TASK Group Holdings Limited ("TASK"). TASK, an Australia-based entity, offers international unified commerce solutions, including interactive customer engagement and seamless integration, tailored for major brands worldwide. This has made TASK’s transaction management platform the platform of choice for some of the world’s most successful and recognized foodservice brands including, Starbucks and Guzman Y Gomez, while its loyalty customer engagement platform is used by McDonald’s in 65 markets. With the addition of TASK, the Company will be able to serve the top enterprise foodservice brands across the globe with a unified commerce approach from front-of-house to back-of-house.
Current wording
•Acquisition of TASK Group: In July 2024, the Company secured a term loan of $90.0 million under the Credit Facility which was used in connection with its acquisition of TASK Group. TASK Group, an Australia-based entity, offers international unified commerce solutions, including interactive customer engagement and seamless integration, tailored for major brands worldwide. The TASK Group’s transaction management platform, TASK, is used by some of the world’s largest foodservice brands including, Starbucks and Guzman Y Gomez, while its loyalty customer engagement platform, Plexure, is used by McDonald’s Corporation in 65 markets. With the addition of TASK Group, the Company will be able to serve the top enterprise foodservice brands across the globe with a unified commerce approach from front-of-house to back-of-house.
Previous wording
Refer to “Note 15 – Subsequent Events” of the notes to interim condensed consolidated financial statements in "Part I, Item 1. Financial Statements and Supplementary Data" of this Quarterly Report for additional information about the sale of RRC, the Credit Facility, and the acquisition of TASK.
Current wording
Refer to “Note 3 – Acquisitions”, “Note 4 – Discontinued Operations”, and “Note 8 – Debt” of the notes to interim condensed consolidated financial statements in "Part I, Item 1. Financial Statements (unaudited)" of this Quarterly Report for additional information about the sale of RRC, the Credit Facility, and the acquisition of TASK Group.
Previous wording
Hardware revenues were $20.1 million for the three months ended June 30, 2024, a decrease of $6.3 million or 23.8% compared to $26.4 million for the three months ended June 30, 2023. The decrease primarily consists of decreases in hardware revenues from terminals of $2.8 million, kitchen display systems of $2.1 million, and peripherals (scanners, printers, and components) of $0.6 million. These decreases were all substantially driven by the timing of tier one enterprise customer hardware refresh cycles, onboarding of Operator Cloud customers buying hardware, and the Company's market launch of its next generation PAR headset.
Current wording
Hardware revenues were $22.7 million for the three months ended September 30, 2024, a decrease of $3.2 million or 12.3% compared to $25.8 million for the three months ended September 30, 2023. The decrease primarily consists of decreases in hardware revenues from international hardware sales of $1.3 million, peripherals (scanners, printers, and components) of $0.8 million, and tablets of $0.6 million. These decreases were substantially driven by the timing of tier one enterprise customer hardware refresh cycles and timing of onboarding of Operator Cloud customers buying hardware.
Previous wording
Professional service revenues were $13.2 million for the three months ended June 30, 2024, an increase of $0.4 million or 3.1% from $12.8 million for the three months ended June 30, 2023. The increase was substantially driven by a $1.0 million increase in hardware repair services and a $0.5 million increase in field operations, partially offset by a $1.2 million decrease in installation services.
Current wording
Professional service revenues were $14.2 million for the three months ended September 30, 2024, an increase of $2.7 million or 23.3% from $11.5 million for the three months ended September 30, 2023. The increase was substantially driven by a $1.1 million increase in hardware repair services, a $0.8 million increase in field operations, and a $0.5 million increase in installation services.
Previous wording
Subscription service revenues were $83.3 million for the six months ended June 30, 2024, an increase of $24.9 million or 42.7% compared to $58.3 million for the six months ended June 30, 2023. The increase was substantially driven by increased subscription service revenues from our Engagement Cloud services of $13.6 million, of which revenues of $12.7 million were contributed by the business and products that we acquired in the Stuzo Acquisition, and now sold under PAR Retail. The residual increase of $0.9 million from our Engagement Cloud services was driven by a 3.9% organic increase in active sites. Our Operator Cloud services increased $11.2 million driven by a 19.7% increase in active sites and a 17.8% increase in average revenue per site equally driven by cross-selling initiatives, upselling, and price increases.
Current wording
Subscription service revenues were $143.2 million for the nine months ended September 30, 2024, an increase of $53.5 million or 59.6% compared to $89.7 million for the nine months ended September 30, 2023. The increase was substantially driven by increased Engagement Cloud subscription service revenues of $35.5 million, of which $31.2 million was driven by inorganic increases in revenues of $23.4 million and $7.8 million stemming from the post-acquisition operations of the PAR Retail and Plexure product lines, respectively. The residual increase of $4.3 million from Engagement Cloud subscription services was driven by an 8.5% organic increase in active sites. Operator Cloud subscription services increased $17.7 million of which revenues of $1.4 million was driven by an inorganic increase in revenues stemming from the post-acquisition operations of the TASK product line. The residual increase of $16.3 million from Operator Cloud subscription services was driven by an 18.3% increase in organic active sites and a 13.1% increase in average revenue per site equally driven by cross-selling initiatives, upselling, and price increases.
Previous wording
Hardware revenues were $38.3 million for the six months ended June 30, 2024, a decrease of $14.8 million or 27.9% compared to $53.2 million for the six months ended June 30, 2023. The decrease primarily consists of decreases in hardware revenues from terminals of $6.0 million, peripherals of $3.4 million, and kitchen display systems of $3.4 million. These decreases were all substantially driven by the timing of tier one enterprise customer hardware refresh cycles, onboarding of Operator Cloud customers buying hardware, and the Company's market launch of its next generation PAR headset.
Current wording
Hardware revenues were $61.0 million for the nine months ended September 30, 2024, a decrease of $18.0 million or 22.8% compared to $79.0 million for the nine months ended September 30, 2023. The decrease primarily consists of decreases in hardware revenues from terminals of $6.2 million, peripherals of $4.2 million, and kitchen display systems of $3.7 million. These decreases were substantially driven by the timing of tier one enterprise customer hardware refresh cycles and timing of onboarding of Operator Cloud customers buying hardware.
Previous wording
Total gross margin as a percentage of revenue for the three months ended June 30, 2024, increased to 41.0% as compared to 27.6% for the three months ended June 30, 2023.
Current wording
Total gross margin as a percentage of revenue for the three months ended September 30, 2024, increased to 44.5% as compared to 36.6% for the three months ended September 30, 2023.
Previous wording
Subscription service margin as a percentage of subscription service revenue for the three months ended June 30, 2024, increased to 53.1% as compared to 43.3% for the three months ended June 30, 2023. The increase was substantially driven by a continued focus on efficiency improvements with our hosting and customer support costs as well as improved margins stemming from post-acquisition operations of PAR Retail.
Current wording
Subscription service margin as a percentage of subscription service revenue for the three months ended September 30, 2024, increased to 55.3% as compared to 50.6% for the three months ended September 30, 2023. The increase was substantially driven by a continued focus on efficiency improvements with our hosting and customer support costs as well as improved margins stemming from post-acquisition operations of PAR Retail and TASK Group.
Previous wording
Professional service margin as a percentage of professional service revenue for the six months ended June 30, 2024, increased to 21.9% as compared to 13.0% for the six months ended June 30, 2023. The increase primarily consists of an increase in margin for hardware service repair and field operations.
Current wording
Professional service margin as a percentage of professional service revenue for the three months ended September 30, 2024, increased to 29.2% as compared to 23.8% for the three months ended September 30, 2023. The increase primarily consists of increased margins for field operations and installations substantially driven by improved cost management.
Previous wording
Total gross margin as a percentage of revenue for the six months ended June 30, 2024, increased to 39.2% as compared to 29.0% for the six months ended June 30, 2023.
Current wording
Total gross margin as a percentage of revenue for the nine months ended September 30, 2024, increased to 41.3% as compared to 31.5% for the nine months ended September 30, 2023.
Previous wording
Subscription service margin as a percentage of subscription service revenue for the six months ended June 30, 2024, increased to 52.4% as compared to 46.6% for the six months ended June 30, 2023. The increase was substantially driven by a continued focus on efficiency improvements with our hosting and customer support costs as well as improved margins stemming from post-acquisition operations of PAR Retail.
Current wording
Subscription service margin as a percentage of subscription service revenue for the nine months ended September 30, 2024, increased to 53.6% as compared to 48.0% for the nine months ended September 30, 2023. The increase was substantially driven by a continued focus on efficiency improvements with our hosting and customer support costs as well as improved margins stemming from post-acquisition operations of PAR Retail and TASK Group.
Previous wording
Hardware margin as a percentage of hardware revenue for the six months ended June 30, 2024, increased to 22.5% as compared to 17.8% for the six months ended June 30, 2023. The increase in margin primarily consisted of improved inventory management resulting in lower excess and obsolescent inventory charges, and improved margins from terminals and kitchen display systems, primarily driven by price increases.
Current wording
Hardware margin as a percentage of hardware revenue for the nine months ended September 30, 2024, increased to 23.6% as compared to 20.2% for the nine months ended September 30, 2023. The increase in margin primarily consists of improved inventory management resulting in lower excess and obsolescent inventory charges and improved margins from terminals and kitchen display systems primarily driven by price increases.
Previous wording
Professional service margin as a percentage of professional service revenue for the three months ended June 30, 2024, increased to 27.5% as compared to 7.7% for the three months ended June 30, 2023. The increase primarily consists of increases in margins for hardware service repair and field operations.
Current wording
Professional service margin as a percentage of professional service revenue for the nine months ended September 30, 2024, increased to 24.4% as compared to 16.3% for the nine months ended September 30, 2023. The increase primarily consists of increased margins for hardware service repair and field operations substantially driven by improved cost management.
Previous wording
S&M expenses were $9.8 million for the three months ended June 30, 2024, a decrease of $0.3 million or 2.6% compared to $10.1 million for the three months ended June 30, 2023. The decrease primarily consists of a decrease in organic S&M expense of $1.1 million due to decreases in marketing expense and commissions, partially offset by an increase in inorganic S&M expense of $0.8 million stemming from post-acquisition operations of PAR Retail.
Current wording
S&M expenses were $10.5 million for the three months ended September 30, 2024, an increase of $1.0 million or 10.2% compared to $9.5 million for the three months ended September 30, 2023. The increase consists of an increase in inorganic S&M expense of $1.1 million stemming from post-acquisition operations of PAR Retail and TASK Group while organic S&M expense decreased by $0.1 million.
Previous wording
S&M expenses were $20.7 million for the six months ended June 30, 2024, an increase of $1.3 million or 6.5% compared to $19.5 million for the six months ended June 30, 2023. The increase primarily consists of an increase in inorganic S&M expense of $1.0 million stemming from post-acquisition operations of PAR Retail. Organic S&M expense remained flat for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Current wording
S&M expenses were $31.2 million for the nine months ended September 30, 2024, an increase of $2.2 million or 7.7% compared to $29.0 million for the nine months ended September 30, 2023. The increase primarily consists of an increase in inorganic S&M expense of $2.1 million stemming from post-acquisition operations of PAR Retail and TASK Group while organic S&M expense remained flat.
Previous wording
R&D expenses were $16.2 million for the three months ended June 30, 2024, an increase of $1.3 million or 9.1% compared to $14.9 million for the three months ended June 30, 2023. The increase primarily consists of an increase in inorganic R&D expense of $2.3 million driven by post-acquisition operations of PAR Retail, partially offset by a decrease in organic R&D expense for our other Engagement Cloud offerings of $0.8 million as we right sized our headcount associated with our early stage product offerings.
Current wording
R&D expenses were $17.8 million for the three months ended September 30, 2024, an increase of $3.2 million or 21.6% compared to $14.7 million for the three months ended September 30, 2023. The increase consists of an increase in inorganic R&D expense of $3.4 million driven by post-acquisition operations of PAR Retail and TASK Group while organic R&D expense decreased by $0.2 million as we continue to reinforce efficiency in our R&D function.
Previous wording
R&D expenses were $32.0 million for the six months ended June 30, 2024, an increase of $2.8 million or 9.6% compared to $29.2 million for the six months ended June 30, 2023. The increase primarily consists of an increase in inorganic R&D expense of $2.9 million driven by post-acquisition operations of PAR Retail. Organic R&D expense remained flat for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Current wording
R&D expenses were $49.8 million for the nine months ended September 30, 2024, an increase of $6.0 million or 13.6% compared to $43.9 million for the nine months ended September 30, 2023. The increase consists of an increase in inorganic R&D expense of $6.3 million driven by post-acquisition operations of PAR Retail and TASK Group while organic R&D expense decreased by $0.3 million as we continue to reinforce efficiency in our R&D function.
Previous wording
Amortization of identifiable intangible assets was $1.9 million for the three months ended June 30, 2024, an increase of $1.5 million as compared to $0.5 million for the three months ended June 30, 2023. The increase primarily consists of an increase in amortizable intangible assets stemming from the Stuzo Acquisition.
Current wording
Amortization of identifiable intangible assets was $2.7 million for the three months ended September 30, 2024, an increase of $2.2 million as compared to $0.5 million for the three months ended September 30, 2023. The increase primarily consists of an increase in amortizable intangible assets stemming from the Stuzo Acquisition and TASK Group Acquisition.
Previous wording
Gain on insurance proceeds was $0.5 million for the three months ended June 30, 2023, which consists of $0.5 million in proceeds received from the settlement of a legacy insurance claim. There was no comparable gain for the three months ended June 30, 2024.
Current wording
Gain on insurance proceeds was $0.1 million for the three months ended September 30, 2024, which consists of $0.1 million in proceeds received from the settlement of a legacy insurance claim. There was no comparable gain for the three months ended September 30, 2023.
Previous wording
Amortization of identifiable intangible assets was $2.9 million for the six months ended June 30, 2024, an increase of $1.9 million as compared to $0.9 million for the six months ended June 30, 2023. The increase was primarily driven by an increase in amortizable intangible assets stemming from the Stuzo Acquisition.
Current wording
Amortization of identifiable intangible assets was $5.6 million for the nine months ended September 30, 2024, an increase of $4.2 million as compared to $1.4 million for the nine months ended September 30, 2023. The increase was primarily driven by an increase in amortizable intangible assets stemming from the Stuzo Acquisition and TASK Group Acquisition.
Previous wording
Included in operating expenses for the six months ended June 30, 2024, was a $0.6 million decrease to the fair value of the contingent consideration liability for certain post-closing revenue focused milestones from the MENU Acquisition compared to a $7.5 million decrease for the six months ended June 30, 2023.
Current wording
Included in operating expenses for the nine months ended September 30, 2024 was a $0.6 million decrease to the fair value of the contingent consideration liability for certain post-closing revenue focused milestones from the MENU Acquisition compared to a $7.5 million decrease for the nine months ended September 30, 2023.
Previous wording
Gain on insurance proceeds was $0.5 million for the six months ended June 30, 2023, which consists of $0.5 million in proceeds received from the settlement of a legacy insurance claim. There was no comparable gain for the six months ended June 30, 2024.
Current wording
Included in operating expenses for the nine months ended September 30, 2024 was $0.1 million in insurance proceeds from the settlement of a legacy insurance claim compared to $0.5 million in insurance proceeds from the settlement of a legacy insurance claim for the nine months ended September 30, 2023.
Previous wording
Other (expense) income, net was $(0.6) million for the three months ended June 30, 2024, a decrease of $0.8 million compared to $0.2 million for the three months ended June 30, 2023. Other (expense) income, net primarily consists of rental income, net of applicable expenses, foreign currency transactions gains and losses and other non-operating income/expenses. The change was substantially driven by increases in sales and use tax expense and other miscellaneous expenses.
Current wording
Other expense, net was $1.4 million for the three months ended September 30, 2024, an increase of $1.1 million compared to $0.3 million for the three months ended September 30, 2023. Other expense, net primarily consists of rental income, net of applicable expenses, foreign currency transaction gains and losses and other non-operating income/expenses. The change was substantially driven by increases in foreign currency transaction losses and other miscellaneous expenses.
Previous wording
Other (expense) income, net was $(0.3) million for the six months ended June 30, 2024, a decrease of $0.5 million compared to $0.1 million for the six months ended June 30, 2023. Other (expense) income, net primarily consists of rental income, net of applicable expenses, foreign currency transactions gains and losses and other non-operating income/expenses. The change was substantially driven by increases in sales and use tax expense and other miscellaneous expenses.
Current wording
Other expense, net was $1.7 million for the nine months ended September 30, 2024, an increase of $1.6 million compared to $0.1 million for the nine months ended September 30, 2023. Other expense, net primarily consists of rental income, net of applicable expenses, foreign currency transaction gains and losses and other non-operating income/expenses. The change was substantially driven by increases in foreign currency transaction losses and other miscellaneous expenses.
Previous wording
Provision for income taxes was $0.6 million for the three months ended June 30, 2024, an increase of $0.2 million as compared to $0.4 million for the three months ended June 30, 2023. The change was substantially driven by an increase in foreign jurisdiction tax obligations.
Current wording
Provision for income taxes was $0.7 million for the three months ended September 30, 2024, an increase of $0.5 million as compared to $0.2 million for the three months ended September 30, 2023. The change was substantially driven by an increase in foreign jurisdiction tax obligations.
Previous wording
Benefit from (provision for) income taxes was $7.2 million for the six months ended June 30, 2024, an increase of $7.9 million as compared to $(0.7) million for the six months ended June 30, 2023. The change was substantially driven by a reduction of the Company’s valuation allowance which resulted from the establishment of deferred tax liabilities related to the Stuzo Acquisition.
Current wording
Benefit from (provision for) income taxes was $6.5 million for the nine months ended September 30, 2024, an increase of $7.4 million as compared to $(0.9) million for the nine months ended September 30, 2023. The change was substantially driven by a reduction in the Company’s valuation allowance which resulted from the establishment of deferred tax liabilities related to the Stuzo Acquisition.
Previous wording
Net income from discontinued operations was $79.9 million for the six months ended June 30, 2024, an increase of $74.6 million as compared to $5.3 million for the six months ended June 30, 2023. The increase was substantially driven by a $76.8 million gain from the sale of PGSC. The residual amount represents PGSC and RRC operating income, offset by a provision for income taxes relating to the gain from the sale of PGSC.
Current wording
Net income from discontinued operations was $0.8 million for the three months ended September 30, 2024, a decrease of $2.9 million as compared to $3.7 million for the three months ended September 30, 2023. The decrease was primarily driven by PGSC and RRC operating income only being included for the three months ended September 30, 2023, partially offset by a gain from the sale of RRC.
Previous wording
Net income from discontinued operations was $77.8 million for the three months ended June 30, 2024, an increase of $75.6 million as compared to $2.1 million for the three months ended June 30, 2023. The increase was substantially driven by a $76.8 million gain from the sale of PGSC. The residual amount represents PGSC and RRC operating income, offset by a provision for income taxes relating to the gain from the sale of PGSC.
Current wording
Net income from discontinued operations was $80.7 million for the nine months ended September 30, 2024, an increase of $71.7 million as compared to $9.0 million for the nine months ended September 30, 2023. The increase was substantially driven by a $77.2 million gain from the sale of PGSC and RRC. The residual amount represents PGSC and RRC operating income, offset by a provision for income taxes relating to the gain from the sale of PGSC and RRC.
Previous wording
Active sites represent locations active on our subscription services as of the last day of the respective reporting period.
Current wording
Active sites represent locations active on our subscription services as of the last day of the respective reporting period. Our key performance indicators ARR and active sites are presented as two subscription service product lines:
Previous wording
*Inorganic Engagement Cloud ARR represents PAR Retail ARR only in the six months ended June 30, 2024. During the three months ended June 30, 2024, PAR Retail ARR was adjusted as of the acquisition date as a result of measurement periods adjustments to the purchase price allocation in accordance with ASC Topic 805, Business Combinations.
Current wording
*Inorganic Engagement Cloud ARR represents PAR Retail and Plexure ARR only as of September 30, 2024.
Previous wording
*Inorganic Engagement Cloud active sites includes PAR Retail active sites only in the six months ended June 30, 2024.
Current wording
*Inorganic Engagement Cloud active sites includes PAR Retail and Plexure active sites only as of September 30, 2024.
Previous wording
In addition to disclosing financial results in accordance with GAAP, this Quarterly Report contains references to the non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance. Our non-GAAP financial measures reflect adjustments based on one or more of the following items below. The income tax effect of the below adjustments, with the exception of (provision for) benefit from income taxes, were not tax-effected due to the valuation allowance on all of our net deferred tax assets.
Current wording
In addition to disclosing financial results in accordance with GAAP, this Quarterly Report contains references to the non-GAAP financial measures below. We believe these non-GAAP financial measures provide investors with useful supplemental information about our operating performance, enable comparison of financial trends and results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business and measuring our performance. Our non-GAAP financial measures reflect adjustments based on one or more of the following items below. The income tax effect of the below adjustments, with the exception of non-recurring income taxes, were not tax-effected due to the valuation allowance on all of our net deferred tax assets.
Previous wording
Beginning with this Quarterly Report, we have modified our definition of adjusted subscription service gross margin percentage and have renamed this non-GAAP measure to non-GAAP subscription service gross margin percentage. Non-GAAP subscription service gross margin percentage is adjusted to exclude amortization from acquired and internally developed software, stock-based compensation, and severance costs included within subscription service cost of sales. Our prior definition of adjusted subscription service gross margin percentage only excluded amortization from acquired and internally developed software. This change was made to conform with the methodology that we use to calculate other non-GAAP measures, including adjusted EBITDA outlined below, and to align with how management views our core operating performance.
Current wording
Non-GAAP subscription service gross margin percentage is adjusted to exclude amortization from acquired and internally developed software, stock-based compensation, and severance costs included within subscription service cost of sales.
Previous wording
The tables below provide reconciliations between net income (loss) and adjusted EBITDA, diluted net income (loss) per share and non-GAAP diluted net loss per share, and subscription service gross margin percentage and non-GAAP subscription service gross margin percentage.
Current wording
The tables below provide reconciliations between net income (loss) and adjusted EBITDA, diluted net income (loss) per share and non-GAAP diluted net loss per share, and subscription service gross margin percentage and non-GAAP subscription service gross margin percentage. Amounts presented in the reconciliations and other tables presented herein may not sum due to rounding.
Previous wording
Our primary sources of liquidity are cash and cash equivalents and short-term investments. As of June 30, 2024, we had cash and cash equivalents of $114.9 million and short-term investments of $27.5 million. Cash and cash equivalents consist of highly liquid investments with maturities of 90 days or less, including money market funds. Short-term investments are held-to-maturity investment securities consisting of investment-grade interest bearing instruments, primarily treasury bills and notes, which are stated at amortized cost.
Current wording
Our primary sources of liquidity are cash and cash equivalents and short-term investments. As of September 30, 2024, we had cash and cash equivalents of $105.8 million and short-term investments of $12.6 million. Cash and cash equivalents consist of highly liquid investments with maturities of 90 days or less, including money market funds. Short-term investments are held-to-maturity investment securities consisting of investment-grade interest bearing instruments, primarily treasury bills and notes, which are stated at amortized cost.
Previous wording
Cash used in investing activities was $72.9 million for the six months ended June 30, 2024 compared to $6.2 million for the six months ended June 30, 2023. Cash used in investing activities during the six months ended June 30, 2024 included $166.3 million of cash consideration paid in connection with the Stuzo Acquisition (net of cash acquired) and capital expenditures of $2.7 million for developed technology costs associated with our software platforms, partially offset by $87.1 million of cash consideration received in connection with the disposition of PGSC and $9.4 million of proceeds from net sales of short-term held-to-maturity investments.
Current wording
Cash used in investing activities was $178.1 million for the nine months ended September 30, 2024 compared to $4.8 million for the nine months ended September 30, 2023. Cash used in investing activities during the nine months ended September 30, 2024 included $293.6 million of cash consideration paid in connection with the Stuzo Acquisition and the TASK Group Acquisition (net of cash acquired) and capital expenditures of $4.0 million for developed technology costs associated with our software platforms, partially offset by $92.1 million of cash consideration received in connection with the disposition of PGSC and RRC and $24.9 million of proceeds from net sales of short-term held-to-maturity investments.
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Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Hardware margin as a percentage of hardware revenue for the three months ended June 30, 2024, increased to 22.8% as compared to 19.2% for the three months ended June 30, 2023. The increase in margin primarily consisted of increased margins from terminals and kitchen display systems, both substantially driven by price increases.
Previous report — wording carried elsewhere
Included in operating expenses for the three months ended June 30, 2024, was a $0.6 million decrease to the fair value of the contingent consideration liability for certain post-closing revenue focused milestones from the MENU Acquisition compared to a $2.3 million decrease for the three months ended June 30, 2023.
Previous report — wording carried elsewhere
Our key performance indicators ARR and active sites are presented as two subscription service product lines: Engagement Cloud (Punchh, PAR Retail, and MENU) and Operator Cloud (Brink POS, PAR Payment Services, PAR Pay, and Data Central).